Don’t tax you; don’t tax me. Tax that fellow behind the tree.

The author of the above ditty is uncertain.  What is certain is that no one wants to pay taxes: Not individuals: Not corporations: Not churches: Not schools: Not the ever-expanding surfeit of tax-exempt entities.

The current administration promises to make tax reform a priority. . . a tough and thankless task. But, as always, I am willing to help by contributing insightful ideas. (Some might say ‘inciteful’)

Income taxes typically accrue to the federal government plus, with some exceptions, states and/or municipalities.  Large corporations and wealthy individuals are adept at hiding income by moving it to off-shore entities having little or no taxes. Estimates of profits held offshore vary widely but hover around $2.6 Trillion. The good news is: Moves are afoot to repatriate much of that sequestered largesse. Hopefully, they will work.

What happens to that repatriated windfall, if and when it returns to the U.S., is murky. Will it be invested in new factories, new businesses, infrastructure; or returned to investors in the form of dividends and stock buy-backs?  Let’s leave that for later discussion.

Property taxes, on the other hand, accrue to municipalities based upon someone’s estimate of the property value on a year-by-year basis.  That someone is typically hired by the local government for a fee. (Hmmm.)  I have not heard if this issue is on the President’s ‘to-do’ list.

But in the vast majority of the nation, universities, churches and nonprofit entities are exempt from property taxes; despite enjoying enormous endowments and/or large revenue streams from tuition and research grants. The top ten universities ranked by endowment size are:

1. Harvard University:            $36.4 billion
2. Yale University:                    $25.6 billion
3. University of Texas              $24.1 billion
4. Princeton University:            $22.7 billion
5. Stanford University:             $22.2 billion
6. MIT:                                          $13.5 billion
7. Texas A&M:                             $10.5 billion
8. Northwestern University:     $10.2 billion
9. University of Pennsylvania: $10.1 billion
10. University of Michigan:      $10.0 billion

These schools pay no taxes, period – not on campus grounds or buildings, private houses that generate income, hotels run by the schools, sports stadiums, etc.  All, however, are supported by local police, fire, highway systems, elementary and secondary schools for faculty children and other municipal services. Exempting nonprofits from tax is grounded in the belief that they provide some service to society; that in their absence, would have to be provided by the government.  But for most nonprofits that is not true. Universities argue that they employ thousands of people who contribute to society as a whole. Okay, corporations do the same and still manage to pay their fair share. The real estate owned by these nonprofits is worth billions, yet they pay no tax: Ordinary people who live in their towns do. There is nothing fair or just about that.

You know it’s a good idea because local governments and nonprofits both resist the notion. Local mayors fear they will never get as much from additional taxes as they now collect from their state houses. (That’s because they do not have the expertise to assess the amount of tax dollars that would be generated.) Nonprofits, on the other hand, do not want their golden ox gored. Governors, however, will love it.

Similar arguments can be made for churches and religious organizations, though the numbers are more difficult to unearth. Religion being the third rail of American politics; churches need not report on their activities and no government official has the courage to question their policies or demand an accounting. Facts are obscured; that is, until a scandal brings them to light.

Jim Jones was a communist cult leader who led 918 followers to their deaths in Guyana as pastor of the Disciples of Christ Movement. Neither he nor his church ever paid a dime in taxes (though sales of Kool-aid plummeted).

James Bakker, an ex-convict, televangelist, former Assemblies of God minister and former host of The PTL  (Praise the Lord) Club, an evangelical Christian television program he operated with his wife Tammy. A sex scandal led to his resignation from the ministry. His church and TV business operated tax free for fifteen years.

Scripture:  If you have ten friends willing to watch you slit a goat’s throat every Sunday, you too can be tax exempt.  People, we really have to tighten these rules. They are being massively abused.

Another example: The Vatican Bank funds and operates churches, charities and shelters worldwide. Conservative estimates put its annual untaxed revenues at $8 Billion. No statement of their real estate values in the U.S. can be found, though conservative estimates are in the tens of billions. They get an unfettered financial ride despite numerous and rampant abuses including child endangerment.

Now, over 800 churches of all faiths are flaunting federal rules regarding sanctuary status for illegal aliens.

Schools, Churches and other exempts must be taxed.  Yes, they will scream. But they can’t continue to skim the cream and not help sell the milk.

New revenue from these sources could go a long way toward funding infrastructure repairs. The federal government has abandoned any responsibility to maintain existing roads, bridges, tunnels, airports, etc.  They have subliminally informed states that maintenance is their responsibility. All proposals in the yet-to-be-approved budget seem directed toward new construction.

Mr. President: “Are you and Mr. Mnuchin listening?”

You are welcome. My fee is $2,500/diem.

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